The present invention relates to life insurance policies and, more specifically, to life insurance methods, systems and products that incorporate a fixed account, a separate account, and under specified circumstances provide a death benefit, e.g., a guaranteed death benefit.
Current insurance products have certain drawbacks. Term life insurance has a limited guarantee period and does not provide cash accumulation. Whole life has a relatively high premium and does not provide investment choices for value in its savings component. Universal life also does not provide investment choices for value in its savings component. Variable universal life typically has limited death benefit guarantees and extracts a relatively high cost for the guarantees.
Expanding on this last point, because a policyholder can put the money necessary to satisfy the death benefit guarantee in any investment account, including the most aggressive and risky, the premium required to guarantee that the policy will not lapse is relatively high. In other words, because an insurance company needs to ensure that a policy holder's account has a specified account value to cover the cost of the insurance, if the policy holder is able to indiscriminately put the account value of the policy into risky investments, the insurance company will, in turn, need to require that the policy holder pay correspondingly higher premiums to ensure that policy will have the specified account value. Thus, a need exists for methods, systems and products for providing life insurance that do not suffer from the above-mentioned drawbacks.